Above all other things, Charles de Vaulx (Trades, Portfolio)’s IVA International Fund (Trades, Portfolio) prizes fundamental value in the stocks it holds. It looks for other things – financial strength, temporarily depressed earnings or entrenched francises – but fundamental value, not relative value, is what counts. In recent years, the Fund frequently has produced double-digit returns.
The Fund’s most significant second-quarter transaction was the purchase of a 322,209-share stake in Hyundai Mobis Co. Ltd. (XKRX:012330, Financial), a Seoul, South Korea-based automotive parts and service supplier, for an average price of â‚©226619 (about $193.94 in U.S. currency) per share. The acquisition had a 2.92% impact on the Fund’s portfolio.
Hyundai Mobis has a market cap of $20.06 trillion and an enterprise value of $16.18 trillion. It has a P/E of 10.6, a Price/Book of 1.1 and a Price/Sales of 1.1. Charles de Vaulx (Trades, Portfolio) and Tweedy Browne (Trades, Portfolio) Global Value have shares of Hyundai Mobis in their portfolios.
The purchase made Hyundai Mobis the seventh-most valuable stake in the Fund’s portfolio.
The Fund bought a 2,074,413-share stake in Phoenix New Media Ltd. (FENG, Financial), a China-based media company, for an average price of $7.46 per share. The deal had a 0.78% impact on the Fund’s portfolio.
Phoenix New Media has a market cap of $329.11 million and an enterprise value of $202.92 million. It has a P/E of 17.0, a Price/Book of 1.2 and a Price/Sales of 1.3. Value Partners (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Columbia Wanger (Trades, Portfolio) have shares of Phoenix New Media in their portfolios.
The Fund acquired a 2,550,856-share stake in Uranium Participation Corp. (TSX:U, Financial), a Toronto-based financial services company, for an average price of C$5.43 (approximately $4.12 in American dollars) per share. The purchase had a 0.51% impact on the Fund’s portfolio.
Uranium Participation has a market cap of $597.73 million and an enterprise value of $583.63 million. It has a P/E of 3.3, a Price/Book of 0.9 and a Price/Sales of 3.2.
The Fund also bought stakes in two other companies – HSBC Holdings PLC (LSE:HSBA, Financial) and Daiseki Co. Ltd. (TSE:9793, Financial).
The Fund added to 13 existing positions in the second quarter, led by the purchase of 13,271,300 shares of First Resources Ltd. (SGX:EB5, Financial), a Singapore-based palm oil producer, for an average price of S$1.94 (roughly $1.39 in U.S. money). The acquisition had a 0.95% impact on the Fund’s portfolio.
First Resources has a market cap of $2.53 billion and an enterprise value of $3.05 billion. It has a P/E of 12.2, a Price/Book of 1.9 and a Price/Sales of 3.4.
The Fund purchased 2,510,764 shares of Great Eagle Holdings Ltd. (HKSE:00041), a Chinese real estate company, for an average price of HK$29.08 (about $3.75 in American currency) per share. The deal had a 0.45% impact on the Fund’s portfolio.
Great Eagle Holdings has a market cap of $15.67 billion and an enterprise value of $51.84 billion. It has a P/E of 7.5, a Price/Book of 0.3 and a Price/Sales of 1.9. Tweedy Browne (Trades, Portfolio) Global Value has shares of Great Eagle Holdings in its portfolio.
The Fund acquired 288,100 shares of Benesse Holdings Inc. (TSE:9783), a Japanese correspondence education and publishing company, for an average price of ¥3376.27 (approximately $24.74 in U.S. dollars) per share. The transaction had a 0.35% impact on the Fund’s portfolio.
Benesse Holdings has a market cap of $305.88 billion and an enterprise value of $210.01 billion. It has a P/E of 121.7, a Price/Book of 1.6 and a Price/Sales of 0.7. Charles de Vaulx (Trades, Portfolio) has shares of Benesse Holdings in his portfolio.
The Fund bought 655,141 shares of Antofagasta PLC (LSE:ANTO), a London-based Chilean company involved in mining, railroad transportation and telecommunications, for an average price of £7.52 (roughly $10.28 in American money) per share. The deal had a 0.34% impact on the Fund’s portfolio.
Antofagasta has a market cap of $5.71 billion and an enterprise value of $6.9 billion. It has a P/E of 19.5, a Price/Book of 1.3 and a Price/Sales of 2.0. Tweedy Browne (Trades, Portfolio) Global Value and Charles de Vaulx (Trades, Portfolio) have shares of Antofagasta in their portfolios.
The Fund purchased 652,684 shares of Millennium & Copthorne Hotels PLC (LSE:MLC), a London-based hospitality management and real estate company, for an average price of £5.83 (about $7.97 in U.S. currency) per share.
Millennium & Copthorne Hotels has a market cap of $1.71 billion and an enterprise value of $2.69 billion. It has a P/E of 14.8, a Price/Book of 0.8 and a Price/Sales of 2.0. Charles de Vaulx (Trades, Portfolio) has shares of Millennium & Copthorne Hotels in his portfolio.
With that purchase, Millennium & Copthorne Hotels became the ninth-most valuable stake in the Fund’s portfolio.
The Fund also added to its stakes in Earth Chemical Co. Ltd. (TSE:4985), Thaicom PLC (BKK:THCOM), Arcland Sakamoto Co. Ltd. (TSE:9842), Hongkong and Shanghai Hotels Ltd. (HKSE:00045), APT Satellite Holdings Ltd. (HKSE:01045), Danone (XPAR:BN), Bollore SA (XPAR:BOL) and Robertet (XPAR:RBT)
Reductions and divestitures
The Fund sold nine stakes from its portfolio and reduced its positions in 12 others. The Fund sold nearly half of its stake in Toho Co. Ltd. (TSE:9602), a Tokyo-based film, theater production and distribution company, for an average price of ¥3116.95 (approximately $22.84 in American dollars). The deal had a -1.32% impact on the Fund’s portfolio.
Toho has a market cap of $495.21 billion and an enterprise value of $488.35 billion. It has a P/E of 23.1, a Price/Book of 1.8 and a Price/Sales of 2.4. Charles de Vaulx (Trades, Portfolio) has shares of Toho in his portfolio.
The Fund reduced its position in Digital China Holdings Ltd. (HKSE:00861), a Chinese ecommerce platforms, solutions and services company, by more than 56%, selling 14,876,000 shares for an average price of HK$11.84 (roughly $1.34 in U.S. money) per share. The sale had a -0.78% impact on the Fund’s portfolio.
Digital China has a market cap of $8.65 billion and an enterprise value of $8.65 billion. It has a Price/Book of 1.0 and a Price/Sales of 0.1. Charles de Vaulx (Trades, Portfolio) has shares of Digital China in his portfolio.
The Fund sold 426,300 shares of San-A Co. Ltd. (TSE:2659), a Japanese clothing, food, electronics and appliances retailer, for an average price of ¥5041.13 (about $36.93 in American currency) per share. The deal had a -0.78% on the Fund’s portfolio.
San-A has a market cap of $166.85 billion and an enterprise value of $125.46 billion. It has a P/E of 21.2, a Price/Book of 2.0 and a Price/Sales of 1.0. Matthews Japan Fund (Trades, Portfolio) has shares of San-A in its portfolio.
The Fund also sold portions of its stakes in, among others, Hi-Lex Corp. (TSE:7279), As One Corporation (TSE:7476) and Okinawa Cellular Telephone Company (TSE:9436).
The most significant stake that the Fund sold was its 12,732-share stake in Lotte Chilsung Beverage Co. Ltd. (XKRX:005300), a Seoul, South Korea-based beverage manufacturer. The stock sold for an average price of â‚©2315890 (approximately $1,740.82 in U.S. dollars) per share. The sale had a -0.95% impact on the Fund’s portfolio.
Lotte Chilsung has a market cap of $2.8 trillion and an enterprise value of $3.45 trillion. It has a P/E of 53.4, a Price/Book of 1.2 and a Price/Sales of 1.3.
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